India Rising

January 1, 2004byAnthony DeMarco

The goals of India’s gem and jewelry industry, as articulated by the country’s Gem & Jewellery Export Promotion Council (GJEPC), don’t lack for boldness. They include transforming India into the “world’s largest trading center,” becoming a $16 billion industry by 2007, making India a “one-stop shop” for jewelry, training artisans and designers to “international levels,” and taking the “Indian jewelry industry to an eminent position in the global map.”

The 2003 India International Jewellery Show was designed partly as a coming-out party for the newly assertive Indian jewelry industry. Organizers at the 20th installment of the show (held July 18-21 at the NSE Complex in Mumbai) said the efforts to make this year’s show a true international event were the most ambitious ever. Among the new initiatives:

For the first time, the show was limited to the trade and not open to the general public.

There was an 80% increase in the number of exhibitors (483 using 611 booths).

The show welcomed international delegations from 13 countries including Japan, Saudi Arabia, Hungary, Thailand, Germany, Nepal, Myanmar, Hong Kong, Bangladesh, and countries from Latin America. Also for the first time, there was an Italian Pavilion.

Show organizers made a concerted effort to bring in journalists from around the world.

‘One-stop shop.’ In interviews at the show and during trips to manufacturing sites, the Indian jewelry industry showed that it’s ready and eager to embrace the “one-stop shop” concept. Numerous diamond manufacturers have expanded into jewelry design and manufacturing, and products range from low-end high-volume merchandise for the mass market to luxury designs for some of the most exclusive stores in the world.

Suashish Diamonds Ltd. is a prime example. Based in Mumbai, with offices throughout India and in Hong Kong and New York, it’s already one of the country’s three largest diamond manufacturers and claims to have the most laser cutting machines under one roof (65). The company in recent years also has become one of the largest manufacturers of diamond and gold jewelry—from high-volume to luxury—with its own jewelry designers trained in house. The United States represents 65% of the company’s total business, and its jewelry can be found in J.C. Penney, Wal-Mart, Sterling, Zale, and Friedman’s, among others.

Not satisfied with just manufacturing diamonds and jewelry, the company opened its first retail store under the brand name Ishi’s in February. The store specializes in three lines of diamond-studded jewelry using white, yellow, and two-tone gold. The company plans to open 30 retail outlets by the end of 2004 and spread the brand worldwide by opening hundreds of Ishi stores. “In today’s economy, you have to do everything,” said Kuldip Singh Lallie, head of Suashish Diamonds’ manufacturing operations, during a tour of its 100,000-sq.-ft. manufacturing facility in Mumbai. “You have to be a one-stop shop.”

In addition to spreading out into many avenues, the company is incorporating more efficient ways to manufacture diamonds. Using laser-cutting technology, the company has created 129-facet and 145-facet diamonds and has developed a manufacturing procedure that can use up to 70% of the rough cut. “We continue to look for ways to add value to the product,” Lallie says.

Using its 65 lasers, Suashish Diamonds can perform diamond cutting on a massive scale nearly around the clock. Even though production of diamonds is largely automated, Lallie says the company will have to expand its 14,000-member work force to keep pace with demand. “We are creating more jobs by adding more volume,” he says.

Nearly all of the companies interviewed at the show were devising ways to expand and diversify their product lines. For example, Indian diamond and jewelry manufacturer Gemplus Jewelry India Ltd. and retail brand Damas—based in the Middle East—have formed a new brand called D’damas, consisting of nine distinct gold and diamond jewelry lines. The brand will be supported at retail stores with point-of-sale brochures, fliers and catalogs, billboards, TV and radio advertising, Web site advertising, promotional events, and training, says Sameer H. Shah, Gemplus executive chairman. “We’re going to be very, very responsive to retailers.”

In another joint effort, Prism, a manufacturer that specializes in diamond jewelry, is working with the Bhansali Group, a diamond manufacturer, to create lines of diamond rings, pendants, and necklaces. One line, “Illusion,” features jewelry designed to be worn as rings or pendants.

Nirav Bhansali, director of the Mumbai-based company with offices in the United States and Antwerp, says most companies in India are reacting to changing world markets. “The market is changing, and everyone needs to move downstream now,” he says.

Like many other companies in India, Prism is developing lines of jewelry for several markets. Low-end lines are for the Indian market, while the high-end jewelry is for export, Bhansali says. The United States accounts for 40% of the company’s sales.

Also like many other Indian jewelry companies, Prism closed a U.S. manufacturing facility and now does all of its manufacturing in India. That move came in response to the decision by the United States to lift its 6.5% duty on Indian jewelry following the country’s entry into the World Trade Organization. In addition, the Bhansali Group has become an ISO 9001 certified company, which helps ensure that the products are being manufactured to consistent standards.

Bapalal Keshavlal is another company that recognized the need to diversify, says president/owner Romy Mehta. “We were one of the first companies in India to successfully cater to the high-end market,” he says.

The company specializes in rings and necklaces in gold, diamonds, and precious gems, which it started manufacturing about 15 years ago. Before that, it was a diamond manufacturer. About half its business is done in the United States, with some pieces selling for $40,000. The company’s products are sold at high-end stores and have been featured in consumer magazines that reach the luxury market. It has a product line of more than 3,000 pieces.

Design and fashion. Jewelry companies are not alone in their efforts to create fashion and luxury jewelry. GJEPC, which sponsors the show, is pursuing a number of initiatives to upgrade jewelry design to meet European standards.

During the show’s inauguration ceremony, GJEPC chairman Sanjay Kothari announced that a new design center was scheduled to open in Mumbai in August. The center will recruit European designers and focus on European design.

The show featured a “Trends Pavilion,” a joint project of the GJEPC and the National Institute of Fashion Technology. Dhimant Panchal, a senior faculty member at the institute, said the objective was to use market research to determine upcoming design trends and to educate the industry on these trends. The glass-enclosed booth uses computer technology and billboards to present three trend categories identified by the institute:

The Minimalist Line, as the name suggests, refers to the use of subtle color, basic shapes, and simple production techniques to create a variety of jewelry that can be used in many ways.

Icons Revisited looks at traditional themes, such as religious symbols and tennis bracelets.

Beyond the Curve is an attempt to anticipate future trends.

The focus on design and fashion took center stage on the evening of July 18, the show’s opening day, with a fashion show titled “Zephyr—A Breath of Fresh Air.” Some of India’s most renowned models wore jewelry that showcased new design techniques while exhibiting a floral theme. The jewelry, created by Anmol Jewellers, Notandas & Sons, ACE Jewels Ovt. Ltd., Sama Jewellery, Ganjam Nagappa & Sons, CVM Exports, and Dia, featured colors and hues that included azures, aquamarines, and emerald greens along with flaming reds and oranges, deep midnight blues, and starry opals. In an unusual move, the clothes worn by the models were designed to go with the jewelry. The eight-part show was choreographed to original music performed by some of the country’s best-known musicians.

Is India ready? While the diamond and jewelry industries are poised to become world leaders, there is some concern that the country—and the city of Mumbai in particular—might not be ready to support such a move.

In a country of 16-plus languages and no less than seven religions, Mumbai—a city of 18 million people—serves as India’s melting pot, where the wealthy and well educated come to make their mark. The cosmopolitan city is home to many of the country’s most important industries, including textiles and petrochemicals. It’s the center of India’s art, fashion, and entertainment industries, including Bollywood, home of the country’s highly successful motion picture industry.

It’s ironic that Mumbai’s success has created its greatest problems. This city of the wealthy and well educated is also a magnet for the rural poor, who have overpowered the city’s already inefficient infrastructure. Highways are crumbling beneath the weight of monumental traffic. Secondary roads often are unpaved and some are unusable during the monsoon season. Water and sewage systems are inadequate. Many of the poor have settled in shantytowns, living in shacks made of tarps, stone, corrugated metal, and any other materials they can find. Electricity, running water, and sewage facilities are nonexistent in these areas. In fact, water and sewage services in the city are inadequate in general.

Some of these problems were echoed in the NSE Complex building that housed the show. Organizers said more than 17,000 people—two thousand more than expected—packed the low-ceilinged, warehouse-style building during the four days of the show. The air-conditioning system labored under the pressure, and fans had to be installed throughout the building to keep people cool. So many people attended the show on the third day that security personnel blocked the entrance for about an hour, refusing to admit anyone, while announcements urged people who were through with their business to leave.

GJEPC Chairman Kothari addressed these challenges in his opening remarks.

“India’s contribution to the worldwide jewelry trade is outstanding, and IIJS is the most ideal and optimal forum to access this sector,” he said. “It is in this regard that I make an earnest plea to the honorable governor to set up a state-of-the-art convention center in Mumbai and provide more space at the Special Economic Zone and SEEPZ [where many jewelry manufacturers are housed] for additional manufacturing units for production. The need of the hour is to critically amend the labor laws as well as improve the existing infrastructure of the state.”

Despite these challenges, India remains poised to be a major player in the worldwide jewelry industry. The country’s jewelry industry grew 20% in 2003 to $9.1 billion, and if growth continues at this rate, India will achieve its $16 billion goal for 2007. And despite the crowded conditions faced this year at the show, Kothari said organizers are pressing ahead with plans to nearly double the number of booths to 1,000 next year by using additional buildings in the NSE Complex.

Most of the exhibitors interviewed said they were pleased with the amount of business being done at the show by both domestic and international buyers.

Kothari echoed these sentiments in his closing remarks.

“The ultimate compliment to IIJS 2003 is the fact that we have been inundated with stall reservations for IIJS 2004 from the very first day,” he said. “The changes incorporated, as compared to last year, have been greatly appreciated by both exhibitors and visitors.”